Less than others, yet Bandhan Bank concerned over NPA rise in microcredit

Kolkata: BANDHAN Bank managing director Chandra Sekhar Ghosh today said that they are concerned over the increase in the bank’s non-performing asset (NPA) in the microcredit segment and have stepped up monitoring the on-time repayment rate (OTR) to arrest the same.

“Our gross NPA as in December 2017 stands at 1.67 per cent, while the net NPA is 0.8 per cent. This is far less as compared to other banks but what is bothering me is that after being in the microcredit segment for 17 years, most of this NPA has come from this segment,” Ghosh said during a media interaction in Kolkata today to announce Bandhan’s initial public offer (IPO) of equity shares from 15-19 March.

Bandhan, which started as a micro-finance company in 2001 and became a bank in 2015, has accrued the 1.67 per cent NPA in the past three years alone.

“To arrest the rise in NPA, we have stepped up monitoring the OTR by our borrowers at the micro level. The higher the OTR the better it is for us,” Ghosh said, adding that the bank’s current OTR is a little below 99 per cent.

“The basic idea is to bring a defaulting borrower back into the regular installment repayment system. Once he is back, the NPA will automatically get recovered in the future,” he said.

The IPO that Bandhan amounts to 119,280,494 equity shares having a face value of Rs 10 and the offer price ranging between Rs 370-375. Going by norms, 35 per cent of the equity shares on offer is reserved for the retail segment.

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